$2.85 Million Gap in School District Budget

A first look at the East Hampton School District’s proposed budget for 2012-13 on Tuesday evening brought Gov. Andrew Cuomo’s 2-percent tax levy cap up close and personal — to the tune of a possible $2.85 million gap.
The figures used to arrive at the gap are far from complete, however, Isabel Madison, the district’s business administrator, said, acknowledging frustration at the lack of hard numbers.
All municipalities in the state are required to have property tax calculations written in stone by March. But, Ms. Madison pointed out, the district did not yet know what its contributions to the teachers retirement system would be nor has East Hampton Town provided a definitive assessment of taxable properties. So the budget, she said, was fairly nebulous.
The potential budget gap presented Tuesday was arrived at by taking the 2011-12 tax levy of $42.97 million and adding an estimated amount for the growth of the tax base. Doing so increased the tax levy by $1.27 million and the tax rate by 3.9-percent over this year.
Were East Hampton to continue to provide the same programs and comply with a 3.1-percent aggregate increase in mandated teacher salary steps (which add up to approximately $1.1 million), and taking into account expected cuts in state funding, the district would be looking at a shortfall of $2.85 million. No salary increases were included for administration and noncontractual workers.
“This is a moving target,” Ms. Madison said. “There is so much information we don’t have yet.”
The 2011-12 budget was $64.41 million; 2012-13, with an estimated 4-percent increase it would come to $65.44 million. “I used the 4-percent increase per year just for people to get an idea,” Ms. Madison said. “She’s minimizing it,” Richard Burns, the interim district superintendent, commented.
Even if the teachers’ step increases were taken out of the equation, an additional $1.7 million would have to be cut from the proposed budget. “It’s a very significant cut, to say the least,” Mr. Burns said.
If the budget was not approved, and also did not pass after a second vote, the district would be forced to adopt a contingency budget, with a 0-percent increase and $4.5 million in cuts.
Patricia Hope, a board member, who had been a longtime high school teacher, said she remembered what austerity was like in the late 1970s. “There were no sports, no after-school activities at all,” she said. “It was a dreadful year for the children in this community.”
In order to pierce the 2-percent cap, 60 percent of taxpayers would have to approve a proposed budget that caused the tax levy to be higher. But Ms. Madison pointed out that budgets needed to be examined over a three-year period. The 2-percent cap is tied to the New York City rental market and is in effect until June 15, 2016, unless rent control is extended.
“The truth is, the Board of Education of New York State will have to pierce the cap,” Ms. Madison said. She added that school districts may be able to fill the gaps with reserves at first, “but what’s going to happen when there’s no fund balance available anymore?”
“It’s going to be like using your entire savings account,” Ms. Hope said.
“Even in the most benign situation, we still have to cut around $2 million a year,” Mr. Burns warned.
“In order to meet the 2-percent cap, everyone is going to have to work together,” Jacqueline Lowey, a school board member, said.
One silver lining is early retirement that the district is offering those who have been employees for over 10 years. The incentive program includes a one-time bonus of 13-percent of the worker’s most recent annual salary.
“The deadline for incentives is Feb. 10,” Ms. Madison said. “That number is going to be really important for us.”
Sharing services with other districts is another way to make cuts, which was recommended by the district’s citizens advisory committee.
“How serious are we about shared services?” queried Alison Anderson, a board member. “Are we going to actually do something about it? Because I don’t want to waste time discussing it if we’re not.”
“If not, the cuts to educational programs are going to be just extraordinary,” said Laura Anker Grossman, the school board president.
“But are we realistic in thinking we’re going to get anywhere significant for this year?” asked George Aman, another board member. “I think the answer is no.”
Mr. Burns agreed somewhat. “Realistically, shared services would be in the realm of transportation and special services.” However, he added that he did not want to contribute to an illusion that sharing would get going in the coming year and save significant money. “It’s a process,” he said
The next school board meeting is on Tuesday at 7:30 p.m. in the district office. “And we’re going to start going line by line at the next meeting,” Dr. Grossman said. “Slice and dice, stage two,” Ms. Hope added. The next budget work session is scheduled for Feb. 14.
Dr. Grossman also suggested a meeting with the East Hampton Town Board, “sooner rather than later.”
“When the town made those major cuts in social services, it expected Project MOST and other nonprofits to take over, but then cut funding to them as well. So the school district is all that’s left,” she said.